Foxconn Electronics Plans to Enter Contract Software Business.

Foxconn Electronics (Hon Hai Precision Industry) has recruited 10 thousand of software specialists in order to enter the software market, according a media report citing Terry Gou, the chairman of Hon Hai Group. The decision follows the company’s intention to enter services business sector announced earlier this month.

The software arm of Foxconn Electronics, which is one of the world’s largest contract producers of electronics, will be headed by M.C. Sheng, who used to be chief information officer of Advanced Semiconductor Engineering (ASE), as well as by J.T. Ma, the former general manager of Indian software manufacturer TATA Consulting`s Taiwan branch, reports Taiwan Economic News. The software company will be based in Shenzhen, China, and will employ about 10 thousand of software developers initially.

Hon Hai Precision Industry has gained its power by making various components as well as complete devices for other hardware vendors. Foxconn Electronics (a better well-known name of Hon Hai) still has opportunities to grow in the contract hardware manufacturing business, moreover, in the recent years the firm decided to enter branded and channel hardware businesses to grow further; however, as sales of electronics are decreasing because of the global economic slowdown, the company has to find new ways of making businesses.

Contract software market represents a lot of opportunities these days now that many service-oriented as well as software companies are cutting spending.

Since Foxconn will now be able to offer a package containing both hardware and software, it will be able not only to propose new services to its existing customers, but also to find new clients.

At present India is the largest provider of software outsourcing services in the world. In case companies like Foxconn invest into Chinese software outsourcing industry, this may eventually change the market rather considerably.